Govt moves for billion-dollar fund for power, energy sector

The Power and Energy Ministry yesterday finally made a move to create a mega-fund for development of the country’s power-energy sector that has been experiencing cash crunch for long.
At a meeting, the ministry decided to move for the huge fund under which a gas sector development (GSD) fund will also be created first through raising the gas prices.
The estimation of the whole mega-fundraising scheme is yet to be finalised, but the sector needs billions of dollars in investment to meet its demand, said Prime Minister’s Adviser Dr Tawfiq-e-Elahi Chowdhury Birbikram, who presided over the meeting.
Earlier, he said that the mega-fund would be worth Tk 10,000 crore. About the GSD fund, which will be created through raising the gas prices, Energy Secretary Mohammad Mohsin told reporters that the finance ministry has finally given its concurrence for creating the GSD fund. He mentioned that the GSD fund is going to be formed in line with a pending appeal of the Petrobangla with Bangladesh Energy Regulatory Commission (BERC) for raising the gas tariffs. Last year, the BERC rejected the appeal, attaching some conditions that the appeal could only be considered to raise gas price by 10-15 per cent if the Petrobangla moved to create a development fund for the sake of energy security. Another condition tagged by the watchdog body was that the fund must be tax-free and it has to be utilised exclusively for exploration and development works for the gas sector. Explaining the matter, Mohsin said initially NBR rejected the Petrobangla-moved proposal for keeping the GSD fund tax-free. But, after a negotiation, now Finance Ministry has given an innovative solution-that the tax must be paid. But Petrobangla will get back the payments through a budgetary support.
After the solution, now Petrobangla again moves to the BERC to allow it raise the gas prices to create the fund.
Mohsin, however, said raising gas price is a lengthy process and it would not happen so soon.
“Because, it is absolutely the matter of the BERC to consider any appeal for raising price,” he added.
He also claimed that the meeting did not discuss the issue of raising price as it is lying with the BERC.
Tawfiq-e-Elahi said that the country’s power and energy sector needs billions of dollars worth of investment to meet the growing requirement.
“Today we initiated move and within three years we can see the physical result. Because it takes huge time,” he said.
He noted that the power and energy ministry in the current fiscal would try to utilise at least Tk 500 crore from the government’s public-private partnership (PPP) fund of Tk 2,500 crore.
“If we are able to get Tk 500 crore from PPP fund, I believe, it will attract another Tk 2,000 crore from the private sector,” he said.

Courtesy of The Independent